“We jacked interest rates to 20% and it shut off inflation. We were worried about inflation then (in the 70s). We’re now talking about the survival of the world’s financial system, and when the smoke clears, (physical) gold and silver are going to be the last two men standing.
We had solid buying this week, some large orders came in. It was kind of interesting that one of the large buyers (of gold) that called us this week said, ‘I’ve watched this stuff long enough, it’s time to get in....
“It’s a market where there are still a lot of people who are confused as to what to do, but the people who are listening and reading King World News are getting a grasp of what’s going on, and they are going to be in this market.”
Dan Norcini noted this stunning development in the gold market: “You are basically seeing, in gold, a move that is noteworthy. The swap dealers, a category of relatively large traders and big banks, for the first time on my records, are actually net longs in the gold market.
Even back in 2008, at the height of the credit crisis, when there was a huge change of ownership in the gold market and traders were just jettisoning positions, the swap dealers never made it onto the net long side in the gold market.
Well, as of this week, they (swap dealers), they’re net longs. That’s significant because we’re witnessing a very slow, but very important transition in the gold market, where this accumulation we’ve mentioned is certainly occurring. You are getting a very significant change of ownership in the gold market.
This kind of dovetails with that interview we did earlier this week on KWN, where we talked about value based buyers, larger buyers doing some accumulation in gold during this particular phase of the market, where it’s been in a range or a consolidation.
If we do get some kind of upside spark, something to kick this thing out of the top of this trading range, you have a very good base of support with an awful lot of accumulation by value based buyers that has a tendency to set this thing up for an extended or protracted move higher.”
Eric King: “Dan, this is really interesting what you are talking about here, the gold market moving into very strong hands at this point on the long side. And it’s doing that just above where we’re seeing all of that central bank buying out of the East come in.”
Dan Norcini: “Absolutely, Eric, China seems to have put a floor under this (gold) market. Whether it’s China, India, or other Asian players, whoever is doing the buying out of the East, it’s very large in size. And it’s sufficiently large where, once again, when gold dipped down below that $1,580 level this week, those buyers were present again.
We went right down to $1,565, and there again were those buyers. They surfaced, and picked it right back up again, and they pushed it up to about $1,600 (on Friday), with some short covering in there.
These swap dealers, I think they are well aware of the amount of (physical) buying that’s taking place down at those lower levels, below $1,580. So they are moving themselves into position, expecting that buying to put a floor of support underneath their ownership of gold.
The hot money crowd has lost interest in gold for the time being, but the value based crowd is definitely accumulating, they are buying.” |
